“ ”

A PROJECT SUBMITTED TO
UNIVERSITY OF MUMBAI FOR PARTIAL
COMPLETION OF THE DEGREE OF

BACHELOR IN
MANAGEMENT STUDIES
UNDER THE FACULTY OF
COMMERCE

BY
UNDER THE GUIDANCE OF

Hirwal Education Trust

COLLEGE OF COUMPUTER SCIENCE AND INFORMATION

TECHNOLOGY MAHAD RAIGAD

(NAAC Accredited with “B” Grade)

AFFILIATED TO MUMBAI

UNIVERSITY
 Hirwal Education Trust COLLEGE OF COUMPUTER SCIENCE AND
INFORMATION TECHNOLOGY MAHAD RAIGAD

( NAAC Accredited with “B” Grade)

CERTIFICATE

This is to certify that Ms. has worked and duly completed her/his Project Work for the
degree of Bachelor of Management Studies under the Faculty of Commerce in the
subject of FINANCE and her/his project is entitled, “” Under mysupervision. I further
certify that the entire work has been done by the learner under my guidance and that no part of it
has been submitted previously for any Degree or Diploma of any University. It is her/ his own
work and facts reported by her/his personal findings and investigations.

Name & Signature of Guiding

Teacher
 Hirwal Education Trust
College of Computer Science and information

Technology, Mahad-Raigad.

(Affiliated to Mumbai
University) (Accredited by NAAC with “B”
Grade)
Mumbai-Goa Highway, Chambharkhind, Mahad -Raigad,
402301 Email Id:-
[email protected]

Ref.No:- Date:

Project Certificate for BMS (Bachelor of Management Studies) Student

This is to certify that the Project entitled “AN ANALYSIS OF THE USE
OF PLASTIC MONEY IN MAHARASHTRA” by Ms. UMERA KHANDESHI

Seat No in partial fulfillment of BMS (Bachelor of Management

Studies). The project has not been submitted for any other examination and does not
form any other course undergone by the candidate.
It is further certified that they have completed all required all phases of the project.

Signature of Guide Head of the Dept.

College Seal Principal

Internal examiner external examiner

 INDEX
CHAPTER TITLE PAGE
NO.

1 INTRODUCTION 1-2

2 RESEARCH METHODOLOGY 3-16

2.1  OBJECTIVE 17-20

2.2  HYPOTHESIS 21

2.3  SCOPE OF THE STUDY 22-23

2.4  LIMITATIONS OF THE STUDY 24

2.5  SIGNIFICANCE OF STUDY 25-26

2.6  NEED OF THE STUDY 27-29

30-52
3 LITERATURE REVIEW
DATA ANALYSIS INTERPRETATION AND
4 53
PRESENTATION
5 CONCLUSION AND SUGGESTION 54-55

6 REFERENCES 56-57

7 ANNEXURE 58-62
 1. INTRODUCTION

I. AN INTRODUCTION TO BANKS
A bank is a financial institution that provides banking and other financial services to their
customers. A bank is generally understood as an institution, which provides fundamental
banking services such as accepting deposits and providing loans. There are also non-banking
institutions that provide certain banking services without meeting the legal definition of a bank.
Banks are a subset of the financial services industry. A banking system also referred as a system
provided by the bank that offers cash management services for customers, reporting the
transactions of their accounts and portfolios, throughout the day. The banking system in India
should not only be hassle free but it should be able to meet the new challenges posed by the
technology and any other external and internal factors. For the past three decades, India’s
banking system has several outstanding achievements to its credit.
The Banks are the main participants of the financial system in India. The Banking sector offers
several facilities and opportunities to their customers. All the banks safeguards the money and
valuables and provide loans, credit, and payment services, such as checking accounts, money
orders, and cashier’s cheques. The banks also offer investment and insurance products. As a
variety of models for cooperation and integration among finance industries have emerged, some
of the traditional distinctions between banks, insurance companies, and securities firms have
diminished. In spite of these changes, banks continue to maintain and perform their primary role
is accepting deposits and lending funds from these deposits.

II. CLASSIFICATION OF BANKING INDUSTRY IN INDIA

 FIGURE 1

III. BANKING SERVICES

Banking services are regarded as one of the important service. Banks provide financial services
to the customers. Due to the rising competition and liberalization, the banking industry has
become the buyer’s market. Banks need to create and develop the services, which can satisfy the
consumer needs. Customer satisfaction is a very important construct in today’s market and it is
directly influenced by service quality as per earliest studies.
Therefore, the present research work has been carried out to analyze the rural customers’ attitude
towards public sector banks.
Banking in India is so convenient and hassle free that one (individual, groups or whatever the
case may be) can easily process transactions as and when required.
The most common services offered by banks in India are Bank Accounts, Loans, Money
Transfer, Credit and Debit Cards, Lockers.

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In our country only banking sector is that sector which works as a channel in attracting savings
and mobilizing them in required areas. It works as a weapon of capital formation. As, change is
the rule of nature. To alter the policies according to environment fluctuation is known as change
and to explore or use new technology for making change is known as innovation. Today all
sectors are working as innovation acceptor.
Banking sector’s profitability depends on better customer relationship. Moreover, nowadays
today’s consumer banking needs are getting more complex and demands are for more innovative
products. Therefore, give them better services banks have introduced a new profitable
technology called MOBILE BANKING. In addition, many more like internet banking, ATM,
debit card, credit card etc.
With mobile banking technology, banks can offer a wide range of services to their customer such
as funds transfer while travelling, receiving online updates of stock price or even performing
trading while being stuck in traffic.

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M banking gives ability to customer to control their cash outflows anytime, anywhere, without
having to connect to internet
The use of a mobile phone to make payment and carryout other banking transaction called
mbanking has started taking roots in a number of developing countries, including India. M
banking is a service of banks to make available, the facility of banking wherever the customer is
and whenever he needs.
In today’s world, every person has personal mobile rather than having computer at home. Even
rural person also have mobile. With mobile banking customer can bank from anytime and
anywhere.
Over the last few years, the mobile and wireless market has been one of the fastest growing
markets in the world and it is still growing at a rapid race. In addition, spread of mobile phones
across the developing world is one of the most remarkable technology stories of the past decade.
Mobile banking is enjoying a rapid growth in India. It has successfully crossed the introduction
stage. Mobile banking is different from internet banking and ATMs anyways. The internet is not
as commonly used as the mobile phones. Further, the internet requires particular devices such as
a desktop or a laptop.
ICICI bank pioneered in mobile banking service in India. Among public bank, Union bank of
India was first to introduce mobile banking.
M –banking may prove to be an important innovation in developing world.
The public sector bank realized that if they have to survive, they will have to adopt modern
technology, SBI was first to focus on technology and is constantly at work to innovate in an
attempt to lower costs. Technology will not just help them reach out to customer better but also
help them cut costs and improve efficiency.
Hence by adopting right mobile banking regulation and mobile security standards the banks can
reach whole population which result in economic growth of the country.
Banks have changed from paper-based banking solution provider to the latest of the technology
like online banking, Mobile banking.
Mobile banking should reach to the common person at the remotest location in the country.
Mobile banking reaches from high-end to low-end users and from metros to middle towns and
rural areas.
Growth in the M-banking is driven by various facilities like convenience of banking operation,
greater reach to consumer .in M-banking there is no place restriction. It is highly penetration
coefficient as growth of mobile phones is more than computer. It is fully personalized and
private increasing transaction authenticity and is 100% available all the time with the users.

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IV. CONCEPT OF MOBILE BANKING

Mobile banking is a service that provides the banking facilities with help of mobile phone. It
helps us to know about our account information with the help of SMS. Mobile banking not only
give the account information but it provide transaction and payment facilities also such as bill
payment and shopping payment and other bank services also can be provide with the help of
mobile banking so mobile banking is very useful for us and provide all facilities from anywhere
and anytime time with the help of mobile baking.

According to the mobile banking services, it can be divide on two types:

First one, is SMS banking, SMS banking refers to provide the account information through the
SMS whenever you use transaction from your account it alert you about your transaction
whenever you transact from your account with your ATM or at the transaction at the shopping
time, it will alert you via SMS. These facilities help us with any unauthorized transaction and
alert about transact amount, time and place of transaction, which helps to detect the unauthorized
transaction.

Second one, is Application based banking this is refers to provide the banking facility via mobile
with the help of mobile application this facilities are available in smart mobile phone by
downloading application of banking services we can use it. It provides to access and manage our
account with the help of mobile banking. So according to above classification we can say that
mobile banking provide banking services in two way first one is SMS facility and application
services.

V. MOBILE AS A MEDIUM

In this context, the question that often gets debated is “how and why is a mobile device the most
appropriate delivery channel of financial services?” Besides the technology capability to
transmit financial information in an efficient, secure and cost-effective manner enabled by
development of mobile-based applications for banking, the most significant fact about this idea
is the ubiquity of the mobile phones. The number of mobile phones in the country are said to be

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 nearing a billion phones. Hence, banking and financial services, which have already come a long
way from the branch level services to the customer’s home desktop and laptop, can now be
reached to a much larger section of the society, including the financially excluded, through the
medium of the mobile phones. Besides the reach of mobile, there is another reason why mobiles
are the most appropriate medium. What is after all a banking transaction? What purpose does the
traditional cheque serve? In India, if you forget to carry your chequebook for withdrawal of
funds, they provide you with what is call a withdrawal slip. A cheque or a withdrawal slip is a
personalized direction to your banker to put through banking transactions on your behalf. The
authentication is achieved through your signature. Nevertheless, this traditional method is
expensive. A mobile phone achieves the same purpose and enables you to send personalized
secure instructions to your banker to undertake transactions on your behalf. If your bank has
achieved seamless integration with the CBS, then the transaction gets automatically registered.
However, these transactions using mobile are far less expensive than its traditional alternatives.
More importantly, you hold the key since mobile is in your pocket and you need not depend on
bank timings or the rush there to undertake banking transactions. This is perhaps the most
important advantage of the mobile over other alternate payment methods. The mobile phone can
therefore empower the common person to conduct his payment transactions any time and from
anywhere. It is, therefore, no wonder that mobile payments and mobile banking are being hotly
debated in various forums, in India and abroad.

VI. DEVELOPMENTS IN MOBILE TECHNOLOGY

Motorola1 was the first company introduced mobile phone in the year 1973, which is very costly
and also more weight (in Kgs) when compared with present mobile sets which are cheap and
small in size.
1st Generation (1G): The first analog cellular system widely deployed in North America was
the Advanced Mobile Phone System (AMPS). It was commercially introduced in the Americas
in 1978, Israel in 1986, Australia in 1987 and India2 in the year 1995.

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 2nd Generation (2G): Second generation mobile communication replaced the analog signal
with digital signal.
There are two major technical developments occurred that is GSM and CDMA technologies3.
The NTT DoCoMo in Japan introduced internet service on mobile phones in the year 1999. 3rd
Generation (3G): The mobile phone became essential communication system for millions of
users worldwide. The 3G technology developed with the concept of packet switching instead of
circuit switching for data transmission.
4th Generation (4G): The fourth generation4 technology introduced in the year 2009 with the
technology advancement like WiMAX & Long Term Evolution (LTE) technologies.

VII. ORIGIN AND POTENTIAL OF MOBILE BANKING SERVICES

Recognizing the potential of mobile banking, Reserve Bank of India issued the first set of
guidelines in October 2008. The guidelines defined mobile banking as undertaking banking
transactions using mobile phones by bank customers that would involve credit/debits to their
accounts. This definition in a sense provided larger canvas to mobile payments, which in a
narrow sense involved only payment made for a product or service using the mobile phone
either remotely or at the Point Of Sale (POS). These guidelines, which were very broad-based,
laid down the technology and security standards pertaining to safety, confidentiality, integrity,
authenticity and non-reputability. As this was a nascent technology and, to build up customer
confidence in terms of minimizing frauds, the Reserve Bank mandated that all transactions
should be encrypted irrespective of the value. The Reserve Bank also made inter-operability a
cornerstone of its policy. After the initial set of guidelines, several policy relaxations have been
made to further encourage the use of mobile banking taking into account changing economic
environment and feedback of the industry and customers (Box 1). The growth in mobile banking
that has taken place in the country until date, though has been rapid, and is yet to reach the
critical mass that will enable it to deliver on its promise of reaching banking including payment
services at a cheaper, secure and seamless manner to the existing and potential customers. It has
the potential to be the next wave of financial and technological innovation in banking by
universalizing access to banking service without jeopardizing prudential and regulatory
framework of the financial sector.

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VIII. TYPES OF MOBILE BANKING IN INDIA

Banks provide mobile banking services to their clients in the ways listed here:

• Mobile Banking over Wireless Application Protocol (WAP)

• Mobile Banking over SMS (also known as SMS Banking)
• Mobile Banking over Unstructured Supplementary Service Data (USSD)

These mobile banking services have been discussed in detail here:

Mobile Banking over WAP

The customers can download the mobile application of the concerned bank on their smartphones
and then use it to avail various services provided by the bank. They need to register for mobile
banking separately and receive their login credentials to use mobile banking applications, simply
known as mobile apps. Most banks provide mobile apps for iOS and Android devices.

Different banks offer mobile apps to their customers to help them carry out common banking
transactions conveniently. Some banks offer different mobile apps for different banking services.
For instance, the bank may offer an e-Passbook app that only serves the purpose of account
balance check since the app acts like a digital passbook and there is another mobile app for other
services such as funds transfer, bill payment, and more in addition to balance check. The
customers can choose to download one or more apps provided by the bank to avail mobile
banking services.

Some of the major mobile banking services have been mentioned here:

• Account Access: Customers can easily access their bank account using their smartphones by
downloading the mobile banking All they need is to use their User ID and password to
access their accounts. They can then carry out different banking transactions instantly.
• Balance Enquiry: One of the main reasons why people used to visit the bank was to keep
their passbooks updated so that they always knew their current balance. When the balance
enquiry service was offered through ATM, people started using it instead of visiting the bank.
Now, it is even more convenient to check account balance using the mobile banking
• E-Passbook: Some banks offer a separate digital passbook mobile app that customers can
download to check their previous transactions and the latest account balance while others

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 just have this service, as a part of their main mobile banking there is no need to visit a bank
or ATM for balance enquiry or account statement.
• Account Statement: If you want to check your bank account statement, you no longer need
to go to the bank or ATM since you can get the statement on the mobile app of your bank.
Since there are only a few free ATM transactions available to everyone these days, it is better
to avail them only for cash withdrawal; account balance or account statement should be
checked using the mobile app. You can also download your account statement in PDF format
and save it on your phone.
• Fund Transfer: If internet banking and mobile banking have made the lives of people any
easier, it is mainly because of this service. People can now transfer money from their bank
account to an account in their own bank or another bank easily. They may have to pay a
nominal charge to carry out interbank transfers but intra-bank transfers are usually free.
IMPS, NEFT or RTGS transactions can also be carried out easily using mobile apps.
• Bill Payment: Mobile banking has made it easy to pay your mobile, credit card or utility
bills. You can even schedule payments on a certain day of the month so that you do not have
to worry about the payments. There is no need to stand in long queues to pay your phone
bills, credit card bills, etc.
• Branch Locator: If you are in a new city or area, you may need to find a branch of your
bank then you can easily use the mobile banking app to find it. Most banks have a ‘Branch
Locator’ that you can use to find the nearest branch.

• ATM Locator: When you are in a new city or area, you might want to withdraw cash from
an ATM. The easiest way to find an ATM of your bank is to open your mobile banking app
and go to the “ATM Locator.” You will be able to find the address and exact location of the
ATM within your vicinity.
• Requests: There is no need to visit the bank to request a chequebook, new debit card, credit
card, duplicate debit card, etc. since you can do so easily using the mobile app. Most banks
also offer the service to hotlist or block a debit or credit card in the case of loss or theft.

Mobile Banking over SMS

Most banks offer mobile banking services over SMS. The customers need to sign up for this
service, known as SMS Banking, by registering their mobile number. Then, they can send SMS
to the bank to inquire about their account balance, check the mini account statement, etc. The
bank then replies with an SMS that contains the information requested by the customer. The
customers do not need to own a smartphone or internet access to avail SMS banking services.
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Banks have a specific phone number registered and an SMS format that the customers need to
follow to avail of this service. For instance, to check the available balance in their account, they
may have to send an SMS in the format: AVAIL BAL XXXX where XXXX is the last 4 digits of
the account number. The bank replies with an SMS with the current available balance in the
account. It is important to note here that the mobile number registered with the bank and the one
you use to send the SMS needs to be same to avail this service.

Mobile Banking over USSD

Banks offer mobile banking over USSD service to people who do not own a smartphone or have
access to the internet. They can simply use USSD codes provided by the banks to avail banking
services. The customers dial a prefix code and click send. Then, they receive a menu containing
the banking services such as balance enquiry, mini account statement, etc. that they can avail
using their phone. This service is quite popular in rural areas where most people do not own
smartphones and do not have access to the internet.

The generic definition of mobile banking involving credit/debit to the account of the
customerusing mobile has been customized in India to provide two rather unique services. These
are the Inter-bank Mobile Payment System (IMPS) and the Mobile linked Kisan Credit Card
(mKCC).
IX. MOBILE BANKING AND IT’S BENEFITS

There are plenty of reasons why mobile banking has gained so much popularity ever since it was
introduced in India. Here are a few features and benefits of mobile banking:

➢ One of the main benefits of mobile banking is the convenience of having banking services at
your fingertips. There is no need to go to a bank or ATM and wait for the bank to open in
order to check your account balance, transfer money, pay your bills or even see your account
statement. You can do it all using your mobile phone. Fund transfer transactions may
complete when the banks are open but you can check your account balance or get account
statement irrespective of the time or day.
➢ Banks know that not everyone has access to the internet and that is why they offer mobile
banking services to their customers over SMS and USSD. People who own smartphones and
have access to the internet can download and use the bank’s mobile apps while others can
use the mobile banking SMS and USSD services. The customers only need to use the right
SMS format to avail SMS banking services and right prefix for USSD services.

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➢ Your bank account and your personal details are very safe if you use mobile banking, the
bank will give you a set of login credentials, which you can use to sign into your account and
carry out the transactions. These login credentials are passed on to you securely and since
you are the only one who knows your login ID and password, your account is always safe.
Most banks allow you to enable two-step verification where you can only carry out banking
transactions if you enter the One-Time Password (OTP) sent to your registered mobile
number.
➢ Most people want to avail mobile banking services but think that it will cost them a lot.
However, they will be delighted to find out that banks offer these services for free. You do
not need to pay any extra charges to register for mobile banking Unlike ATM transactions
where you get a limited number of free transactions, you can check your account statements,
balance or pay your bills as many times as you want without paying any charges. After the
implementation of GST, you only have to pay a nominal charge to transfer funds or pay your
bills.

X. CHALLENGES OF MOBILE BANKING

The rapid technology development in Mobile technology like 2G, 3G, 4G has become major
challenges for banks. It is visible that the bank, which started Mobile Banking in the form of
SMS banking, then adopted application (software), based model for traditional mobile handsets,
the evaluation of Smart phones, mobile operating system and Mobile Apps posed the banks to
adopt the current technology.
The customers are mostly using ATM and online banking services. Most of the customers feel
comfortable without mobile banking. They also feel, there are chances of misuse in mobile
banking due to mobile handset theft.
Handset operability, Scalability and reliability, Security, Application distribution, Personalization
and many more such issues.

XI. FUTURE DRIVERS FOR MOBILE BANKING

There are various factors, drivers that will empower Indian mobile banking to grow
exponentially in the coming years.
A. Under-banked and Un-Banked Population

Out of 600,000 villages in India only one sixth, have banking services. Almost half of the
country’s population is unbanked. The large section of the Indian population not just in rural
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areas but also in many segments of urban markets, offers a large untapped market with a
tremendous business potential. Financial inclusion is slowly but surely being seen not just as a
social responsibility, but as a potential business model too, for two reasons.

Firstly, the RBI is looking for real business cases and forcing banks for the same and secondly,
because of the huge untapped market for banking services.

B. Demographic Factors

In India the population of youth (between the ages of 14-29) is the largest youth population
globally, which is around 27% of the total 1.2 billion. Furthermore, adding the age group of 30-
44, the proportion is 47%. %. Apart from the huge size of this segment, they are among those
who are the early adopters of latest technology and new services, which presents a huge
opportunity for e/m-banking service providers. It has been observed that for the majority, access
to financial services is a household need, and not only an individual need, and if the account
holder is illiterate, other members of the family are competent enough to execute transactions
and use electronic or mobile banking services.
C. Bank Based Services

It has been observed that poor people, whether in urban or rural completely understand the need
for formal financial services and are well aware of the fact that they are losing money in the
informal sector and whenever they leave money in the household. Many low-income households
also express a clear need for credit facilities – but 51% remain dependent on informal sector
(other sources) moneylenders. Similarly, they are very aware of the drawbacks and costs of
informal remittance schemes, and are to send money to family and friends.

For doing one transaction from a bank, a poor has to incur significant direct and opportunity
cost. The direct cost associated with traveling to a bank branch is not insignificant. They have to
incur about Rs.20 and opportunity costs of wage labour range from Rs.50 to Rs.150 and
sometimes more. As a result, there is growing willingness to conduct transactions through agents
and to pay for these services. Majority of villagers are willing to pay for services that will reduce
their real and opportunity costs.

India continues to be a unique market and regulatory environment with intense involvement of
the regulator and the government. Hopefully, the rapid outreach will make the model sustainable
for all the players, banks, BCNMs and agents and at the same time offer services really needed
by the clients. These two ends are, of course, aligned and mutually beneficial. The gradual
regulatory evolution to support BCs and banks in their outreach efforts continues – and the
results are beginning to emerge.
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The other exciting development is the move to encourage banks to have 25% of their branches in
rural areas. These, presumably low cost branches, can become the hub for financial inclusion
and support wider outreach of branchless banking outlets, while acting as nodes or hubs of the
model. The antiquated post-office structure is also undergoing rapid transformation and all
records will be computerized with plans to link post-offices within the next year.

Many of the lessons learned in the past can very well be applied by the banking sector. With
government goading, the banks in India will soon recognize and respond to this.

TABLE I

Mobile banking services offered by some of the banks in India

NAME OF THE BANK MOBILE BANKING SERVICES
STATE BANK OF INDIA FreedoM
SMS Banking
USSD
UNION BANK OF INDIA SMS Banking
U Mobile
PNB SMS Banking
ICICI IMobile
SMS Banking
M-PESA
MRupee
HDFC SMS Banking
App Based
Browser Based
AXIS BANK Phone Banking
Internet Banking on Mobile
SMS Banking

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 2. RESEARCH METHODOLOGY

METHODOLOGY:
Methodology is system of broad principle or rule from which specific methods or procedures
maybe derived to interpret or solve different problems within the scope of particular discipline.
Methodology is not a formula but a set of practices.
The study was conducted to identify the issues and prospects of mobile banking in India.
Necessary data was collected from different ages of people and analyzed in terms of the
objectives of the study.
There are several ways to collect this basic information. The data for this study was collected by
the survey method. Survey is a research technique in which information is gathered from a
sample of people by use of a questionnaire or interview. It is a method of data collection based
on communication with a representative sample of individuals. The researcher developed a
questionnaire and circulated into among her friends & family to provide details about their
mobile banking services usage, knowledge & issues faced. The survey was designed in a manner
to gain a better understanding of the perspective of customers at both financial and personal
level. This research is based on present study and the findings are supported by the responses
and insights from the sample surveyed.

TYPES OF RESPONDENTS:

This research includes all types of people mostly selected different age, sex and occupation
people.

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RESEARCH DESIGN:
Mobile banking is a new technology for people in India. Bank customers normally use
traditional banking system as they trust this system and they are used to it. People are afraid of
using mobile banking because they cannot feel it trust worthy.
In our country, most of the customers are influenced through advertisements. In recent times,
customers have become more conscious about their savings. Different banks advertise about
mobile banking services to give information about it to all people in the country. This research
study has researched the customer perception on mobile banking based on the above dimensions.
The respondents were approached through questionnaire that was sent to them on their social
media handles. It was felt that the survey will give the correct result. The research is descriptive
in nature, using primary data.
SAMPLE SIZE:
Sample is defined as a subset of the universal population. Sample is small group of respondents
drawn from a population in which the researcher is interested in gaining information and
drawing conclusions. A sample of 80 respondents was selected for study.

SOURCES OF DATA:

During data collection, both primary and secondary data were used for its validity and reliability
as attached in annexures.

Primary Data:
This study used primary data that was obtained directly from the field. Data was collected from
the sample population through questionnaire as attached in annexure.
The open and close-ended questions were used in questionnaire for bank customers.
Secondary Data:
Secondary data were used for providing the theoretical background to the research problem.
The secondary data sources were-journal, books, internet etc.

QUESTIONNAIRE TYPE AND RESPONSES:

The questionnaire was starting with some introductory questions such as name, age, occupation,
education, income and address. These questions provide the basic information about the
respondents. These types of question make respondents comfortable to respond the study.
There are 15 questions in this questionnaire. The respondents were asked the questions to know
their knowledge and perception about mobile banking like “Have you ever heard about mobile
banking?”, “Do you think you should use it?”, “Do you think mobile banking services are trust
worthy?” etc.
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 DATA COLLECTION AND ACCURACY OF DATA:
Generally, most of the people are not interested to give time to answer a questionnaire.
Therefore, it was very difficult to collect actual data because the information of the respondents
was collected by approaching them to answer on social media and not face to face. To overcome
this problem, all possible efforts were made by the researcher herself to ensure the collection of
reasonably accurate information from the respondents. Therefore, it has not been possible to
apply any other method of investigation. Survey method has the advantage that it facilitates
quick investigation and involves lower cost. In order to collect relevant information before
taking data, the whole academic purpose of the study was clearly explained and made clear to
the respondents. Data collected was checked and verified for accuracy and consistency.

2.1 OBJECTIVES OF THE STUDY

The overall objective of the study was to examine challenges facing mobile banking services in
reaching customers in INDIA.

Specifically, the study aimed at:

1. To examine, if banks customers are aware of the services offered by banks on mobile
banking.

2. To find-out whether the security & privacy issues of mobile banking is becoming a
barrier in extending their services to many customers.

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 3. To determine whether the customers are using mobile banking services in their dayto-
day chores.

4. To analyze the future prospects of the m-banking services of the Indian Banking
Industry.

5. To study the challenges faced by Indian banks in adoption of technology and make
recommendations to tackle these challenges.

6. To propose suggestion to improve the Mobile Banking Services based on findings.

2.2 HYPOTHESIS OF THE STUDY

With an objective to know about the prospects and issues of mobile banking in India, reviews of
literature have been done.

However, the related published literature on the area of study is quite meagre.

Hence, the following hypotheses are framed:

HYPOTHESIS 1:

NULL HYPOTHESIS (H0): Customer awareness and illiteracy is not a significant issue in mobile

banking.

ALTERNATIVE HYPOTHSIS (H1): Customer awareness and illiteracy is a significant issue in

mobile banking.

HYPOTHESIS 2:

NULL HYPOTHESIS (H0): Security and privacy is not a significant issue in extending mobile
banking services.

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 ALTERNATIVE HYPOTHSIS (H1): Security and privacy is a significant issue in extending
mobile banking services.

HYPOTHESIS 3:

NULL HYPOTHESIS (H0): Banking customers are not using mobile banking in their routine
life.

ALTERNATIVE HYPOTHSIS (H1); Banking customers are using mobile banking in their
routine life.

HYPOTHESIS 4:

NULL HYPOTHESIS (H0): There is negative prospect for mobile banking in India.

ALTERNATE HYPOTHESIS (H1): These is positive prospect for mobile banking in India.

2.3 SCOPE OF THE STUDY

Based on the literature, the following mobile banking prospects and challenges were discussed
with existing bank customers:

• Mobile compatibility
• Mindset about the mobile banking acceptance
• Availability of facilities
• Security & Privacy issues
• Willingness to adopt mobile banking service in future
• Future trends of mobile banking services
• Standardization
• Challenges facing mobile banking
• Telecom service quality

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2.4 LIMITATIONS OF THE STUDY

The researcher had to face the following problems in collecting data from the respondents.

Usually, most of the respondents have not enough idea about mobile banking. Therefore, it
was very difficult to collect actual data. Because the information of the respondents was
supplied from their idea.

Most of the respondents do not fully use mobile banking which caused another problem to data
collection to the researcher.

Sometimes respondent could not answer to questions accurately and to the point.

In addition, it was difficult to get required information. Some respondents treated their
information as confidential and therefore, it was difficult to have access to them. However,
the respondents were assured that the required data were just merely for the academic
research work and not otherwise.

Some respondents choose to provide wrong information during the primary data collection.
They took this questionnaire just for fun. However, to solve this problem, respondents were
informed about the objectives of the study and that motivated them to provide required
information, which convinced them to provide valid information.

The respondents were usually busy with their work. Therefore, the researcher had to wait longer
than usual to get the data.

Despite of all the challenges, the quality of the data is not compromised and it is noted that the
mobile banking has a bright future.

There is a wider scope for the researchers to analyse other digitalized services also like plastic
money, online transactions and mobile commerce facility provided by the banks.

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2.5 NEED OF THE STUDY
The need of this study was to find out what exactly causing the problem in adoption and
extension of mobile banking services provided by banks in India.

There are various reasons that are being barriers, such as: A.

Customer awareness:

Due to lack of knowledge and awareness about mobile banking, it is also a reason for distrust in
mobile banking services and it is also another reason for risk and security issue in mobile
banking, because this is new technology in banking and financial system so all banking
customer are not aware about it and feel risk to adopt it. Therefore, it is also a big challenge in
front of mobile banking services in India.

B. Security issues & privacy:

There is security of mobile banking services is big issue and challenge. In mobile banking for
the security purpose PIN or PASSWORD is used which may be steal by the attacker or
unauthorized user if mobile device has loss or steal so user have to aware about it. Customers
use sensitive data and information in mobile so here risk with pass of a legitimate application
because third party it may steal our information and send it to another third party provides
application services. Therefore, we have to be aware about application used for WAP mobile
banking services and download a legitimate and authorize application for transaction with
mobile banking services.

C. Virus & malware attack:

There is also risk with virus and malware attack. It may get access to your account information
such as username, password and other information. Like in computer system, there is also risk of
virus and malware attack on mobile banking services. Some malicious code are written to defect
mobile banking like Zeus has used for attack on SMS banking and Zeus used for steal mobile
transaction authentication such as password and pin number. So it is also big security issue and
challenge in mobile banking services.
D. Wireless network:

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All process of mobile banking services is done in wireless mode, so there is also a security risk
in mobile banking services. Mobile device component contact with cell site and dedicated circuit
or microwave for the communication services so if there is any weakness in any part of this
network then risk of attack is increases, so we have to secure all these network and network
devices for a good security services.

E. Authentication issue:

In mobile banking there is authentication risk at the login time or when we access our account
through the mobile system, because in mobile banking for the authentication PINS numbers are
used but PINS authentication method is an old method and many security issues such as
password and id theft were by stealing the password and id unauthorized access may be possible
by getting the password attacker may access our account. Another risk related to authentication
in mobile banking as if mobile has stolen then attacker may get the password through the mobile
and can access the account by using your id and password.

The need of the study is also to find out solutions for these challenges, so that banking industry
can run smoothly and see what the future of mobile banking services in India is.

3. LITERATURE REVIEW

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1. Scornavacca and Barnes (2004) suggest that recent innovations in telecommunications have
enabled the launch of new access methods for banking services, one of these is mobile
banking; whereby a customer interacts with a bank via a mobile device such as a mobile
phone or personal digital assistant.

2. Rugimbana (1995) found that there is vast market potential for mobile banking due to its
always-on functionality and the option to do banking virtually any time and anywhere.

3. Unnithan and Swatman (2001) studied the drivers for change in the evolution of the banking
sector, and the move towards electronic banking including mobile banking by focusing on
two economies, Australia & India and suggested strong growth potential of new banking
channel in India.

4. Clark (2008) suggests that as a Channel the mobile phone can augment the number of
channels available to consumers, thereby giving consumers more low-cost self-service
options by which to access funds, banking information and make payments.

5. Rao (2003) suggest banks will need to expand their thinking about mobile banking beyond
online banking and should start to view mobility as its own powerful and compelling
delivery channel that can help them deliver to end users new value such as immediate access
and additional control of personal finances.

6. According to Vyas (2009), Banks will target non-online banking users who may lack regular
access to desktop Internet but are very likely to own a mobile device.

7. Gupta (1999); Pegu (2000); Dasgupta (2002) also affirms future of mobile banking in India
in their studies.

8. Suoranta (2003) found that the average mobile banking user is married, 25 to 34 years old,
has intermediate education and average income in clerical work. She found that age and
education have a major influence on the use of the mobile phone in banking services. The
adoption theories assume that use of Internet banking precedes the adoption of the mobile
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 phone in banking. However, found that some mobile banking customers omit Internet
banking adoption when adopting the mobile phone for banking actions.

Polatoglu (2001); Al-Ashban and Burney (2001); Karjaluoto (2002); Black (2002) supports
findings of Suoranta in their respective studies.

9. Mas (2008); Lyman (2008) found that there are a large number of different mobile phone
devices and it is a big challenge for banks to offer mobile banking solution on any type of
device. Some of these devices support J2ME and others support WAP browser or only SMS;
presetting a serious challenge.

10. Hayat (2009) suggests that for a banking regulator it is important to provide adequate
protection for consumers, ensure economic stability, provide interoperability of electronic
systems and guarantee security of transactions and Anti-Money Laundering and KnowYour-
Customer principles must also be applied to mobile payments.

11. Comninos (2008) suggest that unbanked will only transact electronically (online/mobile
banking) if there is convenience and security.

12. Sharma and Singh (2009) found that Indian mobile banking users are specially concern with
security issues like financial frauds, account misuse and user friendliness issue - difficulty in
remembering the different codes for different types of transaction, application software
installation & updation due to lack of standardization.

13. Banzal (2010) found that another major issue is the revenue sharing agreements between
mobile service providers, banks, content providers, aggregators and other service providers
like utilities, travel agencies, hotel industry, retailers etc.

14. Bamoriya and Singh (2011) found the mobile banking has the issues and challenges like
mobile handset compatibility, standardizing, software downloading, privacy & security.

15. Mujemula (2009), who studied on the role of mobile banking in customer satisfaction. He
found that mobile banking facility positively influences customer satisfaction and he
concluded that there is customer satisfaction on the use of mobile banking.
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16. Nyakiha (2009) noted that despite the positive perception toward mobile banking services
customers do face challenges and security threats when utilizing the service.

17. Masinge (2010) found that the most crucial factor for the customer was high cost and entrust
due to insecurity. Thus, the service should be affordable and trusted as trust was found to be
significantly negatively correlated to perceived risk.

18. The Basel Committee on Banking Supervision expects risk in banking activities due to
unprecedented speed of change in technological and innovation in products and services. The
committee, which was recommended an integrated risk management, approach for all
activities of a banking institution.

19. The BI Intelligence survey of millennials found, 71% of millennials say it is very important
to have a banking app. 60% say it’s very important to have an app to make payments. 51%
say that they have made a purchase through a mobile website or through an app in the last
month. 27% say they have used their phone to make a payment at a checkout in a store in the
last month.

20. Tarandeep Kaur (2015) discussed that India has third largest reservoir of technical human
resource, but it is not for medium of commerce for mass people, new models need to be
developed and worked out with appropriate strategies to make electronic commerce and M-
commerce as key policy for the development and progress in India. This current state will be
further helpful to develop the new generation E-commerce i.e. mobile commerce for mass in
India. With the explosion of internet connectivity through mobile devices like
Smartphone and tablets, millions of consumers are making decisions online and in this
way enterprises can build the brand digitally and enhance productivity but government
policies must ensure the cost effective methods/solutions. The advancements in
technologies and innovative services shows that India is moving from E-commerce to
Mcommerce, and in future E-commerce and M-commerce will became asset for commerce
by the people to the people in India.

21. Renju Chandran; suggested some ideas and presented three steps to run and improve the
mobile banking services effectively. The author presented the benefits, limitations and

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 problems faced by the customer during the transaction of mobile banking and suggested a
method for improving that service.

22. Aditya Kumar Tiwari; discussed about mobile banking advantages, drawbacks, Security
issues and challenges in mobile banking services and proposed some idea to get the solution
of mobile banking security.

23. V. Devadevan; conversed about Mobile Compatibility, Mind-set about Mobile Banking
acceptance and Security issues. The author depicted from the study that the evolution of
eminent technologies in communication system and mobile device is a major factor and
challenge to frequently changing the mobile banking solutions. The author suggested
creating awareness among the existing customers and providing special benefits for mobile
bankers, which will increase the service.

4. DATA ANALYSIS INTERPRETATION AND

PRESENTATION
Here we discuss presentation of findings and discussions. Several statistical and analytical
methods and tools were used for analyzing the gathered data from the survey. Tables, graphs and
column charts have been used as graphical tools to show analysis of data.

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The first part of the questionnaire was about background characteristics of the respondents. The
second part deals with knowledge of bank customers on the services offered by banks on mobile
banking.
Moreover, the third part concentrates on challenges facing mobile banking services in extending
their services to more customers.
The fourth part determines whether people are extensively using mobile banking in India.
And the last part was about the perspective of respondents about mobile banking future.

4.1. CHARACTERISTICS OF THE RESPONDENTS

The characteristics of the respondents were sought in order to determine various aspects
challenging m-banking services in reaching customers in India. These include age of
respondents.

4.1.1 Age of the Respondents

Age of the respondents was important to this study in order to determine who were
mostly involved in mobile banking. The results in Table 9.1 show that out of 80
respondents 39% were the age between 26 and 33. This was due to the fact the age
comprises of many people and adult who are likely to be early technology adopters.

Table 4.1 Age of Respondents

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 4.2 Mobile Banking Services Used By Respondents.

The study wanted to know mobile banking services used by customers. Through the survey, it was
found that people were using mobile banking services according to their needs. Others were not
using it effectively because they did not know how to use them or are not aware of it.

4.3 Primary use of mobile banking

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Convenience: Mobile banking allows users to perform various banking
transactions anytime, anywhere, as long as they have access to their mobile
device and an internet connection. This convenience eliminates the need to visit
physical bank branches, saving time and effort.

Accessibility: Mobile banking provides access to banking services for

individuals who may not have easy access to traditional brick-and-mortar bank
branches. This is particularly beneficial for people living in remote areas or
those with mobility constraints.

4.4 Satisfaction of user interface of mobile banking apps

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The satisfaction with the interface of mobile banking apps varies depending on the
specific app and the preferences of individual users.

4.5 security issues while using mobile banking

By staying vigilant and implementing these security best practices, users can
help protect themselves against potential security threats while using mobile
banking services.

4.6 security concerns with mobile banking

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Unauthorized Access: If you notice unauthorized transactions or activities in your account,
immediately contact your bank to report the issue and freeze your account if necessary. Change
your passwords and enable multi-factor authentication for an added layer of security.

Malware and Mobile Security: Ensure that your mobile device has up-to-date antivirus and
security software installed. Only download banking apps from official app stores, and regularly
update your apps and operating system to patch security vulnerabilities .

4.7 Challenges faced during mobile banking transaction

while mobile banking offers convenience and flexibility, users may encounter
various challenges related to technology, security, regulations, and user
experience that can affect their ability to conduct transactions smoothly and
securely.

4.8 importance of customers support

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 Effective customer support is essential for addressing mobile banking issues
promptly, providing technical assistance and guidance, ensuring security and
trust, and gathering valuable feedback from users. By prioritizing customer
support and investing in well-trained support teams, banks can enhance the
overall user experience and strengthen customer relationships in the
increasingly digital realm of mobile banking.

4.9 The reliability of mobile banking services during network outages

while network outages can present challenges for mobile banking services, proactive measures
taken by banks and service providers can help mitigate the impact on users and maintain service
reliability to the greatest extent possible.

4.10 Difficulties in linking your bank account with a mobile banking app

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Linking a bank account with a mobile banking app can sometimes be
challenging due to various factors

4.11 Challenges in accessing mobile banking due to poor internet connectivity

Implementing these strategies and considering the unique challenges of accessing

mobile banking services in areas with poor internet connectivity, banks and mobile
banking service providers can help ensure that users can manage their finances
effectively regardless of their location or the quality of their internet connection.

4.12 Improvements in mobile banking services

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Implementing these improvements, mobile banking services can better meet
the evolving needs and expectations of users, enhance user satisfaction, and
maintain a competitive edge in the digital banking landscape.

4.13 satisfaction of variety services offered by of mobile banking

mobile banking users are most satisfied when they have access to a convenient, secure, easy-to-
use, reliable, and feature-rich app that meets their banking needs and preferences while
providing responsive customer support and ensuring accessibility for all users. Continuous
improvements in these areas help drive higher levels of satisfaction and loyalty among mobile
banking users.

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 5.CONCLUSION

Mobile banking has become popular owing to the convenience that it gives its customers. You

can access your account, pay bills, and make cash transfers through cell phone banking. It
offers many benefits over internet banking and banking in person. With the wide range of
mobile connectivity, mobile banking through cell phone can be accessed by anyone. In
India,all the banks should start to follow the concept of mobile banking besides, existing
financial services, which will help us in making our lives easier.

Therefore, this study discussed the challenges and prospects of mobile banking in India.

The study concludes that majority of the respondents knew few services offered by banks
through mobile banking. Thus, customers could use many services as possible if they have
the information about the services offered through mobile banking.

It is further concluded that the extension or growth of mobile banking was faced by fear of
customers’ insecurity and network failure/error and lack of knowledge. This limited the use
of mobile banking services among bank customers.

Moreover, it is found out that despite the use of mobile banking among customers only few of
them were using these services effectively. This according to them was due to inaccessibility,
insecurity, high charges and unreliability of the services.

The current limitations of the mobile banking were also found out through study; those are:

• Mobile Banking offers non checking limited purpose account only.

• Most people have not enough idea about mobile banking yet.
• The customer who has already an account with the bank, he needs addition account for mobile
banking.
• The customer who has the convention and mobile bank account both, he cannot access the
conventional account through mobile account.
• Mobile banking is being used for fund transfer mainly. Customer does not keep deposit for
long duration.
• Mobile banking has no various deposit schemes as of conventional banking yet.
• Mobile banking has no investment/loan schemes yet.
• The data is transferring through a third-party cellular network, so there is a security thread.
• Mobile bank has not interbank fund transfer facility yet.

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The limitation of this study is that it focused only on the latest trends of m banking transactions
and apps only, not considered the other m-banking modes like SMS, mwallet, m-pesa.

In the past few years, the Indian banking sector has completely transformed. The banks are facing
many challenges and many opportunities are available with the banks.

Many financial innovations like ATMs, credit cards, RTGS, debit cards, mobile banking etc.
have completely changed the face of Indian banking. Still there is a need to have more
innovative solutions so that the challenges can be solved and opportunities can be availed
efficiently by the Indian banks.

Research so far has outlined a diversity of challenges and innovations that exists in the
mbanking arena. Numerous solutions have been tried and failed but the future is promising
with potential new technology innovations.

Yes, it is concluded that there is vast scope for growth in mobile banking industry. In future,
the concept of carrying cash or carrying wallet may become obsolete... Your mobile phone
will be able to serve as a debit and a credit card.

In addition to IT edge and relatively dense population, the Government of India is clearly
determined to achieve financial inclusion and is taking aggressive steps to see this happen.

The regulatory body RBI now taking more and more innovative steps and provide various
guidelines to banks for protection of customer account security on mobile website and
applications. Inclusion of non-banking population in financial mainstream will benefit all.
There is also need to generate awareness about the mobile banking so that more and more

people use it for their benefit.

14. REFERENCES

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Banking
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➢ Aditya Kumar Tiwari, Ratish Agarwal, Sachin Goyal - “Imperative & Challenges of
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THANK YOU

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